Japan Airlines System Corp. said Friday it incurred a 57.59 billion yen net loss in the first half of fiscal 2003 due to the SARS epidemic and the Iraq war.

For the full year to March 31, the nation's largest carrier now forecasts a wider loss than initially forecast. It now expects a net loss of 65 billion yen.

Comparable earnings figures for the previous first half are not available because JAL was created via a merger of Japan Airlines Co. and Japan Air System Co. in October 2002.

The two carriers posted a combined net profit of 37.11 billion yen for the same period last year.

Revenue for the April-September period was 944.48 billion yen. The two airlines posted a combined 1.07 trillion yen in the same period last year.

Like its rivals, JAL blamed the steep decline on the severe acute respiratory syndrome outbreak and the Iraq war, which dealt a heavy blow to international passenger flights.

The number of passengers on its international flights plunged 34.3 percent during the six-month period; passenger numbers on flights to China fell by half.

JAL said the SARS outbreak and the Iraq war had a negative impact on its revenue worth 170 billion yen in the first half.

Passenger traffic on its domestic flights meanwhile grew 2.7 percent to 24.3 million, thanks to an expansion in the number of routes and flights through the merger.

Its domestic results outperformed rival All Nippon Airways Co., whose domestic passenger traffic fell 2.6 percent to 22.87 million during the same period.

But the worse-than-expected impact of the SARS and the Iraq war forced the JAL group to downwardly revise its full-year earnings and revenue forecast.

"On recent international flights, business demand has been recovering faster than expected. But leisure demand has been slow to recover, pulling down the total," said Gentaro Maruyama, JAL senior vice president.

In May, JAL forecast a full-year net loss of 43 billion yen.